Print 50 comment(s) - last by rcc.. on Aug 10 at 1:37 PM

The FTC has banned Intel from paying off OEMs to exclusively carry its products or to NOT carry AMD products.  (Source: The New York Times)
Settlement also establishes $10M USD fund that could help OEMs switch to AMD or NVIDIA

Intel, like Microsoft, built a seemingly ironclad lead through a combination of great products and aggressive business maneuvering.  Those maneuvers could be viewed as clever moves or destructive anticompetitive behavior -- it all depends on who you ask.  However, in recent years Intel, like Microsoft, has come under increasing pressure to stop its more "creative" business tactics.  Fined $1.45B USD by the European Union last year, Intel has just arrived at a settlement with the U.S. Federal Trade Commission over numerous antitrust issues.

While the settlement is less painful fiscally than the EU ruling, it will have a major impact on the way Intel conducts its business.  Intel is no longer allowed to pay off (either directly, or through unit discounts) OEMs to exclusively carry Intel CPUs or to not carry competitor Advanced Micro Devices' CPUs.  Likewise, it can no longer retaliate against OEMs who opt to offer competitive products.

Intel is also banned from specifically redesigning its chips to harm its competitors.  Specifically it will be forced to not limit the performance of rivals' GPU chips for at least the next six years.  Also, it must publish clearly that its compiler discriminates against non-Intel processors (such as AMD's designs), not fully utilizing their features and producing inferior code.

The settlement concludes a suit launched by the FTC in December following an investigation.  While it brings no major fines against Intel, it does require Intel to pay $10M USD to establish a fund to help business customers retool their software if they were misled by Intel to think the poor performance of Intel-compiled code on AMD chips was normal. 

Intel’s general counsel, A. Douglas Melamed comments, "[This settlement will] put an end to the expense and distraction of the FTC litigation.  This agreement provides a framework that will allow us to continue to compete and to provide our customers the best possible products at the best prices."

The settlement removes a critical piece of the remaining U.S. litigation on Intel's plate.  Previously, Intel had agreed to a $1.25B USD payout to settle a civil case with AMD last November.  The only major remaining legal action against it now is a lawsuit from the state of New York, alleging illegal anticompetitive behavior.

While the antitrust litigation of the turn of the millenia did not derail Microsoft or significantly alter its PC operating system market share, the latest round -- this time against Intel -- could have a more serious impact.  Unlike Microsoft, Intel has a very aggressive rival in its core business -- AMD.  Last year AMD's CPU shipments grew 17.7 percent on a year-to-year basis, giving it a 19.4 percent market share.  Intel, meanwhile, saw its lead shrink, posting an 80.5 percent market share.

From 2003 to 2006 AMD produced CPUs that were widely considered to outperform similarly priced Intel designs.  While other issues also hampered AMD, it alleges that it largely failed to gain market share during this era thanks to Intel's questionable business practices -- and legal settlements seem to back up this claim.

AMD seems revitalized once more, having taken the discrete graphics sales crown from NVIDIA, thanks to its head start with DirectX 11 GPUs.  If it can duplicate this success on the CPU market, this time it may finally be able to see its hard work pay off with increased OEM adoption -- now that Intel can no longer pay off OEMs not to use its products.  The ball is in AMD's court, as they say.

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: 10 million is a joke
By LordSojar on 8/4/2010 2:26:40 PM , Rating: 1
A pure joke to intel who still makes gigantic profits after taking fines over a billion. Oh and yeah, nice regulation the US has, only took them 10 years to get Intel to play by the rules they should be playing by to begin with. And they still can't make a half way decent GPU-esque architecture.

Uh... the lack of large fines was the point... it was also because AMD didn't testify against Intel in the proceedings. Why? AMD agreed not to present further evidence to the FTC as part of the 1.25B settlement with Intel.

The FTC's goal wasn't to fine Intel outrageous amounts of money (unlike the EU who loves to suck the money out of American companies...), it was to put things on the right course and to prevent this from happening again.

As for the time line; yes, the legal proceedings of this have taken a long time, but it was worth the wait for AMD (nVidia will get some benefit out of this, though not nearly to the degree of AMD's benefits).

As to the Intel not making a good GPU bit; the H55/57 solution with the Corei5/i3 IGPs is actually very viable for everyday use, and accelerates 1080p playback very well.

Intel is in this to make money, and what better way to do so than to cling to the cash cow that is the antiquated x86 architecture. And before anyone says that they now use 64bit... I have news for you, that's still x86. It's x86-64, which is a 64bit extension series for the primary x86 architecture, which AMD "invented". Neither Intel nor AMD actually use a new 64bit architecture. Backwards compatibility, thou art a cruel bitch.

RE: 10 million is a joke
By NullSubroutine on 8/4/2010 3:54:59 PM , Rating: 2
I have to agree that the new rules are far more beneficial than the government taking money away in a fine, the only question becomes enforcement.

"It looks like the iPhone 4 might be their Vista, and I'm okay with that." -- Microsoft COO Kevin Turner

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki